Clothing Stores
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 35,000 clothing retailers in the US generate revenue by selling a variety of apparel and apparel-related products to consumers. Clothing stores sell primarily new clothing, and may specialize in a particular category, such as men, women, children, infants, families, or accessories. Family clothing stores account for 57% of industry sales. Women’s clothing stores are 19%; other specialty stores are 20%, and men’s clothing stores are 4%.
Seasonality of Demand
Most clothing stores experience major seasonal fluctuations during the winter holiday and back-to-school periods.
Trends and Fads Rapidly Change
The clothing industry is in a constant state of change, driven by fashion trends and fads.
Industry size & Structure
The average clothing retailer employs fewer than 20 workers and generates $2-3 million annually.
- The clothing retail industry consists of about 35,000 companies that employ 851,300 workers and generate about $214 billion annually.
- Family clothing stores account for 57% of industry sales. Women's clothing stores are 19%; other specialty stores are 20%, and men's clothing stores are 4%.
- The industry is concentrated at the top, and highly fragmented at the bottom. The top 20 firms account for 55% of industry sales.
- The average independent clothing retailer operates out of a single location, employs fewer than 10 workers, and generates between $300,000 and $900,000 annually.
- The industry includes national chains, regional chains, and independent retailers. Some large apparel manufacturers have retail operations.
- Large companies include TJX Companies (TJ Maxx, Marshalls), The Gap, Nordstrom, Limited Brands, and Ross.
Industry Forecast
Clothing Stores Industry Growth
Recent Developments
May 21, 2023 - Increase in Retail Theft in 2022
- More than 80% of retailers in a recently released survey reported an increase in shrink in 2022, according to Security Info Watch. The 35th Annual Retail Theft Survey by Jack L. Hayes International reported over 340,000 incidents of apprehension for shoplifters and dishonest employees and the recovery of more than $288 million in 2022. About 26 large retail companies participated in the survey representing more than 22,000 stores in the US. Total apprehensions grew 45.6%, and total recovery dollars from the apprehensions rose 70.5% in 2022. Shoplifter apprehensions and recovery dollars from those apprehensions were up over 50% and 90%, respectively, as many retailers returned to making shoplifter apprehensions post pandemic. Over 340,000 shoplifters and dishonest employees were apprehended in 2022, with over $288 million in stolen profits recovered. Recovery dollars, in which the merchandise was recovered but no shoplifter was apprehended, rose 44% in 2022.
- Consumer confidence levels fell in April 2023 after a slight increase in March 2023, according to data from The Conference Board. The Conference Board’s consumer confidence index dipped to 101.3 in April 2023 from 104 in March 2023. According to Ataman Ozyildirim, a senior director of economics at The Conference Board, “Consumers became more pessimistic about the outlook for both business conditions and labor markets. Compared to last month, fewer households expect business conditions to improve and more expect worsening of conditions in the next six months. They also expect fewer jobs to be available over the short term. April’s decline in consumer confidence reflects particular deterioration in expectations for consumers under 55 years of age and for households earning $50,000 and over.” Plans to purchase appliances, autos, homes, and vacations cooled in April 2023, a sign that consumers are pulling back amid reduced optimism, per Ozyildirim.
- Apparel retailers are increasing their use of inventory tracking systems on the sales floor as they fulfill more online orders in local stores, according to the Wall Street Journal. Nordstrom, American Eagle Outfitters, and Victoria’s Secret were cited as examples of merchants expanding their use of radio frequency identification (RFID) chips to provide better visibility to retailers about merchandise inventory within a store. New advanced chip technology, along with the lower price of chips, has allowed retailers to track individual items. Chips can be embedded in a price tag or security tag. As online sales have taken off, retailers increasingly have their stores do double duty as distribution centers and offer services such as buy online and pick up in stores. The closer tracking gives retailers more insight into shoppers’ habits, assists stores with filling orders placed online, reduces shrinkage, and allows store workers to better track merchandise.
- Sales for clothing and clothing accessory stores fell about 4% unadjusted year over year and less than 1% month over month seasonally adjusted in April 2023, according to the National Retail Federation. Overall retail sales were up 1.6% in April 2023 over a year ago and 0.4% from March 2023, according to the US Census Bureau. NRF’s retail sales calculation, which excludes car dealers, gas stations, and restaurants, showed growth of 2% unadjusted year over year and 0.6% month over month in April 2023. According to NRF President and CEO Matthew Shay, “Retail sales rebounded in April, reflecting consumer resilience in the face of elevated economic uncertainty. Moderating price levels, continued labor market strength and wage gains have increased consumers’ ability to spend. However, they remain cautious and concerned about the current economic environment. Retailers continue to provide competitive pricing and convenience to help cost-sensitive consumers stretch their budgets.”
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